TOKYO February 17, 2010; Chang-Ran Kim and Nobuhiro Kubo writing for
Reuters reported that Toyota Motor Corp said on Wednesday it would
install a system to ensure braking trumps acceleration for all new car
models as it seeks to limit the damage from its vast recall woes.

And in a statement unlikely to appease U.S. lawmakers, Toyota President
Akio Toyoda said he believed North America chief Yoshimi Inaba was the
logical choice to testify at the U.S. congressional hearings scheduled for
later this month.

"I have full confidence in the management of Toyota Motor North America,
led by Mr. Inaba, and I believe he is the best placed to testify," Toyoda
told a news conference in Tokyo.

U.S. Rep Darrell Issa, the top Republican on the House Oversight and
Government committee, has said he would support a subpoena to force
Toyoda's appearance to explain their handling of the series of recalls
totaling more than 8.5 million vehicles worldwide for problems with braking
and unintended acceleration.

Toyoda said he planned to visit the United States at some point but that
the best timing needed to be worked out. He would consider whether to
testify "when and if" there was a request, he added.

"I will focus on internal reform to improve quality and support Inaba
from our headquarters," Toyoda said.

Toyoda's news conference follows the automaker's announcement that would
halt U.S. production further to match slowing sales and as U.S. regulators
opened an investigation into whether it had acted in a timely fashion on
the recalls.

The issue has dealt a devastating blow to Toyota's reputation built on
quality, safety and reliability, not long ago the envy of the auto
industry.

Up to 34 crash deaths have been blamed on unintended acceleration in
Toyota vehicles since 2000, according to consumer complaints filed with
U.S. regulators.

The National Highway Traffic Safety Administration has said it believes
five deaths are related to floor mats and none to the "sticky pedal"
problem.

Toyota's brake over-ride system, similar to others used by a number of
automakers, would cut engine power when the brake and accelerator pedals at
the same time.

Toyoda said the world's biggest automaker may have grown too fast,
neglecting adequate training of staff to ensure quality did not trail
behind.

"The basic rule of the Toyota Production System is to only build as many
cars as there is demand for, and we ourselves broke that rule," " he told
his third news conference in two weeks.

Toyota said it would set up training centers for quality improvement
around the world, much like it did to train its growing overseas staff on
Toyota's famous manufacturing process.

Toyota said it would also assign a chief quality officer in each major
region as part of the "Special Committee for Global Quality" announced
earlier this month.

PRODUCTION CUTS

Toyota plans to shut production down at two U.S. factories for a total
of at least 11 days to match slowing sales, barely a week after resuming
production of eight recalled models at six North American plants.

The latest cutbacks throw further doubt on the pace of Toyota's earnings
recovery after the company had only two weeks ago estimated the recalls to
hit global sales by 100,000 units in the financial year to the end of
March.

"There's no question that sales are suffering (in the United States),"
said Mamoru Kato, analyst at Tokai-Tokyo Securities.

"They've estimated a 100,000-unit impact for this financial year. If
this multiplies to several hundred thousands next (financial) year, that
could lead to a year-on-year fall in sales, and a big hit to earnings," he
said.

Toyoda said that production cuts had so far been within expectations and
that he believed the company could stem further sales declines, although it
was impossible to tell for sure.

Toyoda, the grandson of company founder Kiichiro Toyoda, faces one of
Toyota's deepest crises just seven months into his job as the massive
recalls dent confidence in the automaker.

Toyota is already suffering from declining sales in the United States,
its biggest and usually most profitable market, after it suspended sales of
about half its inventory of vehicles including the popular Camry and
Corolla sedans due to potentially sticky accelerator pedals.

In January, its U.S. sales dropped 16 percent to the lowest level in
more than a decade, and another sharp decline is expected for February
since Toyota dealers expect that repairs to inventory will take most of the
month to complete.

REPUTATION DAMAGED

Some analysts said they saw limited direct damage from the U.S.
production cuts announced on Tuesday, and that the bigger concern was to
Toyota's image as U.S. regulators address the possibility of any wrongdoing
by the automaker.

"Reduction of estimated output of a little over 10,000 vehicles would
have only a limited impact, while the move shows Toyota's careful efforts
to minimize the impact of a drop in sales and a rise in incentives," said
Nomura Securities analyst Shotaro Noguchi.

Like most automakers, Toyota books revenue when it produces vehicles and
ships them to dealers. By cutting output, it is choosing to take a sales
hit to keep inventories of unsold vehicles from rising.

The probe by the National Highway Traffic Safety Administration could
lay the groundwork for officials to fine Toyota if they determine the
manufacturer violated its legal obligations. It also faces a number of
lawsuits over the faults and its handling of them.

Also Toyota's executive in charge of quality controls, Shinichi Sasaki, said Toyota was taking seriously complaints about problems in power-steering in the Corolla, the world's best-selling car, the Associated Press reports.